Supervalu and Albertsons Proving a Good Fit
A year after acquiring Albertsons, Supervalu’s numbers are looking good and indications are that better times lay ahead. So, what is Supervalu’s secret?
According to a report by the Minneapolis Star Tribune, Supervalu has succeeded in merging Albertsons into its business by going in with a game plan for integrating new stores and making sure it bought stores that were at or near the top of the market.
Supervalu CEO Jeff Noddle told the paper, “We were very careful at the beginning to plan for all of the transitions that we had to do.”
Supervalu picked up strong stores in Chicago, Los Angeles, Las Vegas and New England and has looked to shed stores in markets such as Milwaukee where it didn’t have as strong a consumer franchise.
Mr. Noddle said Supervalu has not fully completed its transition from the merger. He pointed to roughly 400 people moving into positions at the company’s operations in Eden Prairie and other locations in the Twin Cities area.
Among the major changes that took place with the acquisition of Albertsons was that Supervalu became first-and-foremost a retail operation. Prior to the deal, the Star Tribune pointed out, Supervalu’s business was split roughly 50-50 between retail and wholesale. Today, 80 percent of the company is focused on retail with the balance in wholesaling.
One of the keys to Supervalu’s retailing success appears to be its commitment to building on the existing brand equity of businesses it acquires.
“We didn’t go out and try to convert all of these stores to one banner,” said Pete Van Helden, Supervalu’s executive vice president and president of retail west.
Today, the company operates stores under a number of banners and seeks to take the best ideas from each to create a stronger overall organization.
“There’s lots of idea sharing across the company,” Mr. Noddle said.
One of the things that Supervalu’s CEO insisted be shared was a common corporate culture and focus on achievement.
“He (Noddle) saw the need to put this whole culture thing on the front burner,” Mr. Van Helden said. “Not only did it set the tone, but it set processes in place.”
Discussion Questions: What is your assessment of the job Supervalu has done in integrating the businesses acquired by Albertsons? What work do you see as still needing to be done?